Itâ€™s my opinion that many agents donâ€™t fully grasp the process of performing an accurate market analysis. This opinion comes from 19 years as a certified appraiser that has provided past training to agents exactly about this. As an appraiser I hated hearing â€œâ€¦but my agent saidâ€¦â€ and the information the agent provided would be way off base and the value invariably high.
Simply put, a comp is â€œa reasonable alternative purchase to the subjectâ€; there will not be a â€œperfectâ€ comp. Any comp should be functionally equivalent to the subject; it should meet the same needs of the buyer. In addition to physical characteristics, it should be similar in locational desirability, condition and construction quality. I start looking for comps in the neighborhood and work out; ideally as far as the same school district (elementary first to high school last). Adjustments are made to the comps for differences between them and your home.
Another issue appraisers have with agents is room classification and living area. Itâ€™s common practice to include rooms below grade in the room count, functionally this might work but when an appraisal is complete any basement finished area is considered separately. Square footage is also not typically provided in GA listings due to inconsistent data and reporting. Just these two issues can make a 3BR 1800sf ranch into a 4/5BR 2600sf two story and thatâ€™s what agents see.
When we prepare our â€œReasonable Expectationsâ€ package we comp your home to both active and sold homes; what homes are listed for is one thing, what they actually sell for and concessions sellers make are another. Additionally we use Redlink for our physical data, this is a data base of information provided by appraisers and it is much more accurate than tax data which is very weak at best.
In your situation it appears that the comps the agent used are not accurate so unless something is missing in your post, you probably donâ€™t have a reliable indication of value. The fact that several agents missed the market seems to reinforce the idea that agents are still telling sellers what they want to hear just to have a sign in the yard. Itâ€™s not easy looking across the table and telling a seller that they are in trouble, but a good agent has to do that.
My last comment is for you and other sellers; what I present to you is hard data, not opinion. My role is to advise and ensure that your needs are taken care of with the best outcome possible. Sellers tell me â€œI thinkâ€¦ I wantâ€¦ I need... I paidâ€¦â€ and that really means nothing in this market. The market will determine what your home is ultimately worth, itâ€™s our job to educate you about all of this ahead of time so that you can properly prepare.
You can see much more on how square footage is determined and how we present our â€œReasonable Expectationsâ€ information at my web site â€“ I encourage you to visit it and call with any questions.
Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
RE/MAX Greater Atlanta
Those comps, if different, should be adjusted in price to account for those differences...or if there are similar sold comps within a mile outside the neighborhood, that sold within the last 6 months they may be used as well. We have sold many homes in Cumming and would be happy to meet with you to see your home and discuss comps, pricing and the current market. To see an example of a home we currently have listed in Cumming go to http://www.6540TylerWay.com or go to featured listings on our website, http://www.keylocationsforyou.com.
Keller Williams Realty North Atlanta
I understand why you think that way, and I agree with you, it will NOT be Fair fi the comp compares your house to others that are smaller, with less upgrades..
This is exactly why you need to interview the agents who are actually famiiliar with the properties they compare your house to.
The agents can only gather the propertiest they can find online, but the ones who really know about what they are talking about are the ones who can actually 'explain' to you why one property might worth more than the other; such as -
House B is next door to yours (House A), but A has granite counter, larget yard, and B does not
C is two streets down, but it's next to a busy street, and A is not
D backs up to 'open space - Marin Terms, meaning protected land'; and A has neighbors behind...
And on and on
Of course, don't forget the important part of - this houses was sold two years ago, super seller market, and now we have a buyers market, and that's why.... (and vice versa)
This way, even though they only have a handful examples, they can justify what they are saying and why they would want to price your home the way they suggested.
This is also why Zillow's esimate can not be trusted fully = there needs to be a human's aspect in there.
It does sound as though your house has more of everything than the area's houses. Unless your area is hot right now, holding out for you price may mean you never sell. Buyers are looking for a deal. They are suffering from the rise in price for everything. There is a lot to choose from in houses. If you get a buyer who can qualify to buy, wants your house, and is within 5% of your price, be flattered. Of all the houses they could buy, they chose yours.
Or, don't sell. Your option.
The idea of using comps is focused on finding homes that are similar to the subject property, not identical. Once the similar properties have been identified its a matter of adding or subtracting these values relative to the subject home.
You are correct, normally there needs to be some adjustments between homes in a common neighborhood. If you feel you need accurate numbers for your property, contact an appraiser and have them do an appraisal. This also may clarify the number you need to use for your asking price.
The "Eckler team"
You have some great answers.
The truth is that in most cases there are rarely exact comps, except perhaps in subdivisions. This requires the Realtor to be creative in figuring out what options a buyer has. In most cases location is the first major tipping point. All else being equal, if your home is four bedroom, and there are no four bedrooms in your neighborhood, then three bedrooms with an allowance for a fourth become the leading comparable.
Know that just because your home has a fourth bedroom may not mean it is worth more than a three bedroom. Remember that a list price is a MARKETING TOOL. Most markets are buyer's markets, with more listings for sale than buyers, so you want to be listed UNDER market price to get showings and offers.
In most situations it is very rare that a home, properly marketed, can sell below "market price" because the buyer that makes an offer, and the seller who accepts, create "market value".
I recently had a seller with the same exact issue. Their home did not comapre to any others in the subdivision either. I actually had them get a pre-appraisal to know exactly how to list the home strategically and aggressively. An appraisal is a very important factor when selling your home these days...You as a seller can benefit from this tool by using it as leverage in case you are faced with "low " offers.. My current sellers were faced with "low" offers because co-oping Realtors had nothing to compare their home to. An appraisal may be the key to an aggressive list price and ultimate maximum return on the sale of your home. This will definitely alleviate some of the future hassles. BTW, I am a Realtor not an Appraiser. Hope this helps.. :) Valerie 770-262-8480
The same sort of adds and subtracts can be done for other differences between properties such as lot size, bedrooms, bathrooms.